The housing market in University Place and Fircrest remains sluggish, but median home values continue to rebound.
Fourth Quarter Market Update
for University Place and Fircrest
The housing market is still quiet in University Place and Fircrest, but our median home price is higher now than it was 12 months ago, due in large part to persistently low inventory levels. We haven’t regained all of the value that we lost during the market correction of late 2022 and early 2023, but we’ve started to move in the right direction. If interest rates begin dropping in 2024 as expected, we’ll likely see an uptick in sales activity, but we think home values will remain fairly flat through the year.
The housing market in UP and Fircrest has been extremely quiet. Only 72 single family homes were sold in zip codes 98466 and 98467 in the 4th quarter of 2023 – an 11% decrease in sales activity when compared to the 4th quarter of 2022 and a whopping 44% decrease when compared to the 4th quarter of 2021.
The median home price in UP and Fircrest is up to $630,000 – 2% higher than it was in the 4th quarter of 2022 but still well short of the $700,000 height that we reached right before the market shifted in the spring of ‘22. Homeowners are glad to have regained some equity, but housing affordability is becoming increasingly problematic for buyers. According to a recent New York Times article, only 2.3% of the homes available for sale in the Tacoma area are affordable for our median wage earner (compared to 16% of homes nationwide).
Most economists predict that the Fed will cut interest rates at least two or three times in 2024, which should help to ease the affordability issue to some extent.
Though overall sales activity is down in UP and Fircrest, homes are still selling relatively quickly here. On average, it took about three weeks for listings to move from active to pending in the 4th quarter of 2023 – about the same as before the market shifted in 2022.
Inventory levels remain low in University Place and Fircrest. We should see an increase in new listings if and when the Fed starts to cut interest rates, but buyer demand is also likely to increase in equal measure. That means we probably won’t see much of an increase in available inventory anytime soon.
Current Market Conditions
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- Windermere economist Matthew Gardner predicts that mortgage interest rates could fall as low as 6% in 2024, depending on when the Fed makes cuts, how often and by how much. Rates are currently hovering around 7.5%. Gardner also predicts flat prices in 2024 and a modest uptick in sales activity.
- National Association of Realtors chief economist Lawrence Yun also predicts a flat market in 2024, but he’s more optimistic about sales activity, predicting a 13.5% increase this year.
- Redfin chief economist Daryl Fairweather’s predictions are more conservative. She believes we’ll see a slight drop in home prices in 2024, in response to increased inventory levels, but that mortgage interest rates won’t go below 6.6% before 2025.
- Redfin also predicts a wave of boomerang migration as remote workers are forced to return to the office in greater numbers, many in tech-centric metro markets like Seattle. That bodes well for our local housing trends.
- News outlet Axios reports that Seattle is 9th in the nation when it comes to cost of living, making it more affordable than New York and San Francisco but less affordable than Denver and San Diego.
In the current real estate marketplace, it remains critical for buyers and sellers to seek expert advice. If you’re thinking about buying or selling a home in the area, please contact us to discuss how we can put our knowledge and experience to work for you.
Mark Pinto is a top-producing Realtor with Windermere Chambers Bay, specializing in residential real estate in Tacoma, Gig Harbor, University Place and Lakewood.
Mark Pinto: (253) 318-0923
MarkPinto@windermere.com
